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Business Debt/Personal Guarantee Question as employee

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Expert: - 1/11/2011


Question
Hello,

I was laid off from a contracting firm in CA approximately 5 months ago.
I have been aware that the company has not been doing well and I was recently informed that the company was closing soon.
I just received a letter from a vendor stating that the Rate Quote I signed when we began contracting with this company included a Personal Guarantee. They stated that since the company is closing and the owner is declaring personal bankruptcy they are going to come after me personally.
I was an employee of the company not an officer and I never intentionally signed personal guarantees although I did sign contracts and such with my title following to indicate I was signing on behalf of the company.
On this particular document there is a small 1 line statement,
"By signing below I agree to personally guarantee payment."
I did not intend for myself to be held personally liable for any and all future debts incurred by the company.
I am no longer with the company and have no control of who is paid and who is not.
Please advise if this company is indeed able to legally come after me personally.

Thank you.

Answer
Tara:
Thank you for your inquiry.  It is unfortunate that you have been subject to the fallout of a failed company. In my experience, although someone may have "signed" to agree to a contract arrangement on behalf of the company, you did not represent that you were the company or a partner of that shares true fiscal responsibility. Most likely the 'collector" in this case, has made attempts to get hold of a responsible party, but has fallen short. They begin to look back to see who else they can get hold of to put "pressure" on the responsible party. Because you have signed they used your name and are tactically threatening you to see if you will act out of fear and pay up. Also dependent upon whether they have not been paid within the statue of collections (4 years after last payment made in CA) they may be past the point of begin able to.
A lot of people sign on behalf of employers, but if services were rendered to the company and not you personally, than it is their responsibility to pay. If they can't the vendor loses out. Please be advised, that they may persist, although they may not have the grounds to do so, therefore; know that I am not an attorney nor is this intended to be legal advise. In the event this collector becomes more aggressive and pursues you for payment, please seek legal counsel.

Respectfully,
Christine Janklow

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Christine Janklow

Expertise

As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.

Experience

My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.

Organizations
Provisors;Turnaround Management Association; Los Angeles area

Publications
Accounting Today; Web CPA; National Restauarant Association;Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."

Education/Credentials
Bachelor of Business Administration; Associate of Arts Merchandising

Past/Present Clients
American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers, food service industry and other small businesses and service providers.

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